New York: Citigroup will pay its former India-born Chief Executive Officer Vikram Pandit, who had unexpectedly resigned from his position last month, USD 6.6 million in incentive awards for 2012.
The financial giant will also pay its former President and Chief Operating Officer John Havens USD 6.79 million, it said in a regulatory filing with the US Securities and Exchange Commission.
Chairman of Citi's board of directors Michael O'Neill said Pandit and Havens have made "significant contributions to Citi during their five years of service.
"Vikram steered Citi through the financial crisis, realigned its strategy, bolstered its risk management processes and returned it to profitability. John's focus on our institutional businesses increased our capabilities and helped steer our clients through volatile times.
"Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable," O'Neill said.
While Citi will also honour all past awards that they are legally entitled to, there are no severance payments, he said, adding "awards to which they are not legally entitled have been forfeited".
The board has granted Pandit USD 6.65 million as incentive awards for his "significant" contributions to Citigroup during 2012, the filing said.
Pandit and Havens would not be entitled to any severance payments or special benefits or perquisites as a result of their departures from Citigroup under any employment or separation pay agreement or plan, the company said.
In a surprise move last month, Pandit had quit from the post even after steering the crisis-hit banking giant into profitability.
Media reports at the time had said that Pandit's exit came in the wake of differences with the board.
Pandit had successfully steered the once struggling bank through one of its most difficult times in the financial crisis, repaid nearly USD 45 billion in federal bailout, rebuilt capital and focused on restructuring the sprawling institution.
He had even taken a token salary of just a dollar a year till he was able to get the company back to profitability.
Of the total incentive awards, 40 per cent would be paid in cash and the remaining in deferred cash that will be delivered in four equal instalments in January 2014, 2015, 2016 and 2017.
Under the payment agreements, Pandit and Havens are also barred for a year from working for Citi Capital Advisors, the Citigroup unit that contains the bank's private equity and hedge funds, and would not engage in conduct which, directly or indirectly, causes any Citigroup employee to terminate his or her employment with Citigroup.
Pandit would also no longer have the opportunity to earn the profit sharing, unvested stock option (options that are not yet available), or deferred stock components of the retention award.
Pandit stand to forfeit about USD 24 million in awards due to this condition.
His lost compensation includes awards tied to a USD 40 million multi-year retention plan offered last year.
Pandit would continue to vest in deferred stock--vesting in deferred stock doesn't count as income the way other stock-award plans do -- and deferred cash incentive awards currently valued at approximately USD 8.82 million that were awarded as part of the regular annual incentive awards for performance in 2011.
First Published: Saturday, November 10, 2012, 09:57